Many logistics experts have kept a close watch on congestion in ports and slowdowns in cross-country trucking in the past few years. While railways have perhaps received less media attention, they too have experienced recent disruptions.
As LTL shipping prices rise alongside fuel prices, businesses increasingly rely on railway providers to take on more cargo traffic. At the same time, underinvestment and slow adoption of new technology at some key firms has led to increasing dwell times, lagging maintenance, and significant delays.
In this post, we’ll take a look at some key issues with the current railway system and how they’re being addressed.
What is the current state of the US railway system?
The US freight rail network operates over 140,000 miles of privately owned tracks, moving one-third of total US exports annually and accounting for 40% of long-distance freight. While this system is among the most robust and extensive in the world, upkeep has declined in recent years. Now, the lack of investment is starting to show.
Staffing shortages that began even before the pandemic have gotten worse over the last two years. Many firms have quickly ramped up hiring, but lightning-fast onboarding and training can often impact service quality, leading to excessive dwell times at terminal interchanges and increased transit times along critical corridors between the American midwest and the West Coast.
Other key issues include:
Data visibility challenges
Even as big data improves turnaround at major intermodal hubs, a lack of data visibility (particularly in the first and last mile) can cause issues throughout the supply chain.
Inefficient use of privately owned railcars
Intermodal transport requires a delicate balance in order to operate effectively. A five-minute delay unloading a car somewhere like the Salt Lake City hub can cause a ripple effect of costly time overages throughout the country. So, when privately owned railcars do not fall into workflows in an efficient and well regulated manner, it can cause problems everywhere.
Precision Scheduled Railroading
Otherwise known as PSR, this approach to train scheduling aims to streamline operations across the Class I railroad system. Tight scheduling allows railways to handle incredible amounts of cargo, but when unexpected delays, systemic issues like crew shortages, or a human error snags the scheduling, everything falls out of place.
Famously, many PSR trains are too long for the rail yards that need to accommodate them, causing serious slowdowns throughout the rail system.
Improvements on the horizon
Fortunately, both private and public stakeholders in the supply chain are moving to iron out issues in the intermodal rail system.
In May 2022, regulators at the Surface Transportation Board (STB) made an order requiring freight carriers to report how they plan to improve their service. This push has been spearheaded from the top by key commodities producers, unions, and a bipartisan collection of senators from agricultural and energy-producing states that have been negatively impacted by the status quo.
Similarly, there’s been a push from the Department of Transportation to require Class I railroads to submit service improvement plans and recovery timelines, including a hiring framework for building out staffing infrastructure at key players.
Freightwaves reports that the improvement plans focus on data collection on rail metrics, visibility into both first- and last-mile data, and stricter enforcement for inefficient use of privately owned railcars. The agency may also amend rules surrounding reciprocal switching and final offer rate review. The “big 4” railways are submitting plans to the STB in order to get the ball rolling on improving service across the system.
While the right conversations are happening, it will take time to improve and remedy the American freight system.
Until then, working with an experienced 3PL partner at the port can help improve data transparency, connect you with vital rail systems and freight forwarding, and ensure that your customers get their cargo when and where they need it.
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